What will Texas do now?

Now that the Affordable Care Act has been upheld by the Supreme Court, there are two big issues that Texas will have to face. (*) One is the health care exchanges, and the other is Medicaid expansion, now that there’s no real sanction for refusing to participate in it. On the former, I do expect some action.

It's constitutional - deal with it

The Affordable Care Act requires every state to have a health insurance exchange — a kind of Orbitz for medical coverage — and says if states don’t do it, they’ll get a one-size-fits-all federal plan instead.

In a conference call on Thursday, [AG Greg] Abbott said he’s unsure if and how Texas will set up an exchange, but that Texas will have to “move swiftly.” “That will have to be hammered out in the coming weeks and months,” he said.

Last session, efforts to lay the groundwork for a Texas health insurance exchange were rebuffed by the state’s Republican leadership — even when one key House Republican crafted the legislation. Now, time is of the essence, and the Legislature doesn’t meet again until January.

In the meantime, Texas could establish a state-run exchange through an executive order or via a government agency, said Kandice Sanaie, the governmental affairs manager at the Texas Association of Business (TAB). TAB, which ardently opposes the individual mandate the Supreme Court upheld, worked with other groups last session to try to get a state-run exchange passed, Sanaie said. The bill failed to make it out of committee.

Gov. Rick “Perry was still running for president at that time, and no one wanted to connect Texas with what was going on in Washington,” she said.

Now, Sanaie said, the political climate has changed enough that she believes it is possible the state will move to create its own insurance exchange. But Democratic state Rep. Garnet Coleman of Houston, a proponent of federal health reform, said that would require a dramatic change in Perry’s stance.

Both Sanaie and Coleman said they do not believe the state can afford to wait until the next legislative session to design an insurance exchange, adding that the benefits of a successfully implemented state-run exchange would trump those of a federal one.

“We have the ability to solve problems and craft solutions that take into consideration our uniqueness as a state,” Coleman said. But he said he is glad the state will be required to opt into some kind of exchange “whether or not somebody like Rick Perry said no.”

Rep. Coleman expanded on that here. The legislator who tried to pass a bill establishing an exchange in 2011 was Rep. John Zerwas, who’s a doctor and has a good working relationship with Rep. Coleman on health care issues. If the people who want to get things done have sway, Texas ought to be able to establish its own exchange, though the timing is mighty tight. If it’s Rick Perry who carries the day, then expect nothing to happen till the feds inevitably step in.

As for Medicaid expansion, I have no illusions that Texas will behave any more rationally or humanely than any other bass-ackwardsSouthernstates. I fully expect there to be a huge amount of saber-rattling and chest-thumping on the matter. I also fully expect there will be a lot of pressure from within to go forward with the expansion, because there are a lot of entities below the state level that would greatly benefit from it. Every county and hospital district would surely prefer to have all of the uninsured people that now throng to their emergency rooms get on Medicaid, for example. As Grits notes, Texas could save itself a pile of money by enrolling prison inmates on Medicaid. Sarah Kliff has some numbers:

Let’s take a state like Texas—which has the nation’s highest rate of uninsured residents and is not a fan of the Affordable Care Act. It stands to gain a lot from the federal expansion: It would receive $52 billion from 2014 to 2019, and its Medicaid program would expand by 45.5 percent. One study from Bloomberg Government estimates that Texas would get more money from the Medicaid expansion than any other state.

However, the Lone Star State would also have to spend $2.6 billion of its own money on the expansion and see its Medicaid costs rise by 3 percent over the same time period. This is all to implement a law that the Texas government sued to overturn.

You’d think that a 20 to 1 ratio would be a strong incentive, but we’re talking about a state that is willing to refuse a 9 to 1 match so it can stick a shiv into Planned Parenthood. Rationality is not the driving force here, though apparently the GOP Senate primary runoff is, as David Dewhurst has come out against Medicaid expansion; I’m sure Ted Cruz will follow and will find a way to imply that Dewhurst didn’t do it hard and fast enough. Still, it’s not a straight R versus D battle, and there is another powerful argument in favor of taking the money:

Patricia Gray, who represented Galveston in the Texas House from 1992-2003 and now is special assistant for health policy at the University of Texas Medical Branch in Galveston and an adjunct professor at the University of Houston Law Center, said state leaders may change their minds, especially if Congress allows more flexibility.

“Texas sends more money to Washington than it gets back,” she said. “If we don’t do this, we’re subsidizing New York’s Medicaid expansion, and California’s Medicaid expansion.”

Our leaders do love to complain about Texas not getting its fair share from Washington. There might be more sympathy for that argument if Rick Perry et al didn’t turn their noses up at so much of it. Anyway, at this point it’s not clear how it will all play out. Anything is possible and what ultimately happens my surprise us.

(*) – All this assumes President Obama wins re-election. No Obama, no Obamacare, simple as that. Procedural arcana are only issues when Republicans are in the minority; they just don’t count when it’s their turn to be in charge. We’ll know well before the 2013 Lege is sworn in what if any action they need to think about taking on this.